First Home Buying

So you’ve found that beautiful house and you’re head-over-heels in love with it. It’s stunning; it’s beautiful. You can’t get your mind off of it. You’re already making sketches of which room is where and planning out how you’re going to furnish and decorate each one. Once you’ve found your first home buying it can be an easy or a difficult task depending on many factors. The first thing to do is to sit down with your real estate agent and write up a contract. But don’t worry, this isn’t the kind of thing where you don’t have to go over every little detail and draft it up by hand like a dissertation or an essay. A typical sales contract is derived from a template, which uses different form pages with “fill in the blank” answers for the offer price, the features of the home, which appliances do or do not convey, and several other factors.
Understand the Contract

Your agent should explain each page as you get to it; you’re going to be putting your John Handcock on lots of different pages, and initialling just as many, if not more. She’ll give you a brief overview of each form, what it says, and what she’s written in about the terms of the contract. This is the time to add in contingencies, which are special exceptions to the standard, no-exceptions document. You can specify things like having the seller fix the leaky faucet in the upstairs bathroom or asking them to replace the carpets downstairs.
Be Inquisitive

This is also the time when you need to be asking questions; any item of uncertainty that pops into your mind needs to be brought up. Whether or not you believe there is such a thing as a dumb question, the simple fact is that when you’re buying the biggest-ticket item you’re ever likely to purchase, you couldn’t possibly be any smarter. So make sure you get in and really pay attention to the agent’s explanations; ask about terms or keywords you’re unfamiliar with and find out exactly what you’re agreeing to by signing each page.
Submit Your Offer With Earnest

Your realtor will probably ask you for a paper check to be submitted with the contract. The amount on this check is called the earnest money deposit. Often it’s something like a few thousand dollars or so, and it simply tells the seller that you mean business, and that you’re serious about your offer. Without earnest money deposits, people would generally be far more likely to go around and make fraudulent offers on multiple homes. Then there would be no detriment to them if they accepted the best contract and withdrew all their other offers!

This is another reason to be sure that you’ve truly found a house you love; if you were to have your offer accepted and then decide you no longer wanted the house without good reason, you could lose your deposit.

Nothing can legally be done with your check if the seller doesn’t accept your offer; it is simply a standard bargaining tool. As soon as the offer gets accepted, the check is deposited into an escrow account held by either the real estate agency of the seller or another third party agency. The money stays in escrow until either the date when the home is sold at closing, or the contract is nullified. If you as the buyer decide to back out of the contract, and you have good reason to do so (ie. a problem found with the home upon inspection), you should normally be able to have your deposit returned to you. In other cases, such as having a change of heart and simply choosing not to buy the property, the seller may get the deposit as recompense for their time spent in dealing with you instead of a buyer who is actually going to go through with their initial promise.
Wait

Once you’ve submitted an offer, one of three things will happen: the contract will either be accepted, rejected, or amended. Once your agent has submitted a contract, you can usually expect a response back fairly quickly – within 24 to 48 hours. There are certain circumstances where it may take longer to receive a response, but however long it takes, the time between submittal and response is perhaps the most nerve-wracking period of time in the home buying process. But be patient! Agents are used to their buyers being nervous and excited during this time, but your agent will most likely contact you as soon as she hears something. If the response is positive, you can believe she wants you to know so that you can move on with the next step of the process immediately! If it’s negative, it will be time to start looking for other property and your agent will want you to know right away in that case as well. They know that the anticipation can be almost unbearable, so rest assured that any buyer’s agent work her salt is going to keep you in the loop when any of the outcomes below takes place.
Accepted

If you’ve had a contract accepted, congratulations! The seller will add her signature and send the ratified contract back to your real estate agent. If a seller accepts a contract without an amendment or counter-offer, chances are you’ve done your homework and have put in an offer that conforms to many of the terms that are prevalent in your current local market, including whether you offer more, less, or equal to the sales price, and how you choose to handle closing costs and seller outlay.
Rejected

The most common cause of an outright rejection is the presence of multiple offers on a property. In especially hot markets it is not unlikely that particularly attractive homes will garner quick responses from several buyers. If one of these offers particularly outshines the rest, the seller may accept it outright. However, often if there is a multiple bid situation the seller will notify everyone who submitted a contract and suggest that they submit their highest and best offer. More on that below.
Amended

The seller may return with a counter-offer or amendment that alters the terms of your original contract. Pay close attention to each change suggested; your agent can explain them in detail to you and will most likely do so rather than simply giving you the revised contract to look over by yourself.

A request for your highest and best is one tactic a seller can use to obtain the maximum price for their piece of property, so if you find yourself in this position as a buyer you need to really consider whether you are so in love with the home that it would be worth going above and beyond the asking price to win it. Bidding wars can be tricky business; any psychologist would tell you that whenever another person wants something you want, the object in question gains a much higher perceived value. Keep your emotions in check and make your decision based on good judgment rather than spur-of-the-moment emotion.